Skip to comments.Surprise drop in iPad sales shows the market for Apple’s tablet has saturated
Posted on 08/12/2013 1:22:44 PM PDT by SeekAndFind
Apple sold 5.4 million fewer iPads in its most recent quarter than it did in the same three months a year ago. That’s despite having introduced a whole new iPad, the Mini, in the intervening year. The drop in iPad sales, from 17 million to 14.6 million, is all the more surprising because iPhone sales continued to grow, from 26 million to 31.2 million.
Use of those iPads, however, is running in the opposite direction. Data just released from Adobe show that, as of this month, tablets overall are driving more traffic to websites than smartphones. And, of course, Apple dominates the market for tablets.
In other words, it’s not that tablets aren’t usefulclearly, people are using them more than ever, and primarily to replace PCs. Nor is it the case that Apple’s iPad itself is suffering (all that much) at the hands of Android. Overall, Apple’s mobile iOS is beating Android in terms of web traffic, in the US at least, precisely because of heavy use of the iPad.
Rather, it seems that the overall market for tablets is beginning to saturate, leading to slowing sales of the iPad. Pew recently found that 34% of American adults now own a tablet, with even higher penetration among households earning $75,000 or more (56%) and college graduates (49%). It’s certainly possible that the drop in iPad sales is due to cannibalization by Android tabletswhich now have almost the same global market share as iPads and are shipping in greater numbers each quarterbut many of those tablets are of the cheaper, lower-end variety.
The same trend toward cheaper tablets can be seen in Apple’s own numbers for average revenue per iPad sold. As consumer preference shifts to the cheaper iPad Mini, this revenue continues to drop.
And, just to prove that the trend in iPad revenue isn’t due to increasing costs per unit, here’s a chart of Apple’s overall revenue from iPads, which exactly tracks the number of iPads sold each quarter (the first chart in this piece).
Both the relatively high penetration of Apple’s iPad among the affluent and well-educated and the success of lower-end Android tablets point to the same conclusion: The market for iPads, which consists of people ready to pay $320 for an iPad Mini or $500 for a full-size iPad, is saturating.
At those price points, and given the limitations of an iPad compared to a notebook computer, the iPad is only a “PC replacement” for people who can afford to buy both a PC and a tablet. That’s not as big a market as, say, the billions of people who might buy a cheap Android tablet instead of a PC or even a smartphone, and Apple’s latest numbers suggest the company is now exploring the limits of that market.
There is one more thing these numbers suggest: People are happy to replace their phones on a regular basis, as new models cram in substantial new features (a larger screen, a better display) and the devices are lost, stolen or broken. But tablets simply last longer, leading to a longer replacement cycle.
Maybe people are finally out of money...
Seems reasonable, I bought the grandkids iPads a couple years ago, doesn’t seem to be any need to replace currently.
The price for a used iPad will definitely drop once the LA school systems gives them to every student and every student turns to Craigslist before bemoaning about having “lost” his/her tablet.
LOL on LA.
The Catholic schools here in Indiana have used them for several years but it’s a different slice of the population.
Nah, it’s because everyone is waiting for the iPad “refresh”.
/excuses apple fans will make
The truth is that you can go and buy a droid tablet for 70 bucks at WalMart these days. Why waste time paying 300 for an iPad?
We just bought an Android 7” mini. Prices are half IPad. With Android I can use 3rd party apps that IPad won’t allow, can ise a “dongle” to connect to cell system Internet without buying a “plan” just using a pre-paid account, expand the memory’, use USB devices, etc.
The new systems are much more flexible.
That may be, but my offspring are Apple disciples, for better or worse, like Rush, LOL.
The only solution is to have one iPad for your critical on-line banking & epayments, one for communicating with friends through email & Facebook, etc., and one for general surfing that you can totally wipe and reload whenever infected.
That way they can increase sales significantly.
Drops seem to coincide with the run up to the new iPad release.
or people are just tired of paying 4 times the price for a tablet than can do the task at a lesser price.
you are a slave to the i-plantation.
Me, as well.
I wish however there was some kind of really thick case to put them in, all the screens are cracked but work fine.
The new mini’s will be out for Christmas so maybe new ones all around, the kids use them for all sorts of things: homework, games, facetime, movies, pictures, and they love making their own movies....
I just bought the galaxy II 10.1 tablet. I’m 70. What a kick!!
Yep, just got a new Nexus 7 for $229 - very nice tablet for surfing the web and reading books. Has a better screen than the existing ipad mini.
First thing I did when I bought mine, is to get a thin protective screen cover applied, as well as a rear snap-on cover. I’ve dropped mine with no problems. The protective see-thru cover has held up well to use for two years without any scratches. I also have the leather cover, and a carry bag with pockets. If you’re spending a lot of money for a gadget, it makes sense to protect it for a fraction of the replacement cost.
Better alternatives at half the price. I-pad is price too high.
Actually, iPads are much safer than Android tablets. Lots of articles abound about Androids getting infected and crashing. iPads have lots of security embedded. It also helps if people would use the security features, such as long passwords to unlock the screen (default is four characters, but you can set it to more characters). In several years of use, I've never had any problems surfing the internet with my iPad, unlike with other devices that are attacked.
head slap......of course on the back as well.
Considering they are just kids, I have been amazed its just a crack or two instead of shattered.
Still getting used to it. I wonder what the difference is between it and the much cheaper Droid model.
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